Politicians to secure generous retirement packages

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A COHORT of Coalition and Labor politicians retire at this election their futures secured by taxpayer-funded retirement packages of up to 75% of the highest amount they earned in office, as independent retirees grapple with retrospective Budget changes to their investment decisions.

There are 22 politicians retiring at this election who will receive Lifetime Gold Passes entitling them to 10 business class airfares a year.

They include 12 who are former Liberal members of parliament, three are Nationals and seven Labor.

Former Speaker Bronwyn Bishop will receive a 10-trip gold pass and retirement benefit of around $234,000 or $9000 a fortnight.

Reader poll

Should our politicians be entitled to these retirement packages?

This poll ended on 28 May 2016.

Current Results

Yes, they worked hard for it.

2%

No, taxpayer money can be put to better use.

67%

They deserve something but not this much.

30%

This is not a scientific poll. The results reflect only the opinions of those who chose to participate.

Mal Brough (LNP Fisher) and Warren Truss (Nationals Wide Bay) are among those who qualify.

They will also receive base retirement incomes of between 70 and 73 percent of a parliamentarian's base salary of $157,400 - about $114,000.

This can be further boosted by what is called an additional retiring allowance payable to Ministers or those holding a parliamentary office such as committee chairs.

In effect they receive two retirement allowances, the second calculated at the rate of 6.25% of the additional amount they have been paid per year for serving in those positions.

For those who have held more than one position attracting additional salary the additional pensions are aggregated but can't exceed 75% of the salary payable for the highest office they have held.

If two positions are held concurrently only the highest salary of office is paid.

The spouse or de facto partner of a deceased parliamentarian receive lifetime annuities equivalent to five sixths of their partner's retiring allowance.

Plans to rein in the Lifetime Gold Pass concessions via a Parliamentary Entitlements Legislation Amendment Bill lapsed with the dissolution of both houses of Parliament on May 9.

The amendments would have cut access to those who hadn't qualified before May 13, 2014; required the travel be for the public benefit; limit the benefit to Ministers and office holders to 10 trips a year for only six years or the life of two parliaments whichever the shorter; limit parliamentarians to five trips a year for three years or the life of one parliament and cut entitlements to former politicians other than senior office holders who retired before May 13, 2011.

As the situation stands even those parliamentarians who don't qualify for the generous scheme receive five return trips to be taken in the six months post retirement.

Former member for Fairfax Alex Somlyay who retired at the 2013 election, said he had used only two of the 30 trips he has been entitled to since that date.

The first occasion was to give a Melbourne lecture on parliamentary procedure and the second a trip to Canberra for the celebration of 20 years since John Howard won government.

He said parliamentarians pay a compulsory 11.5% of after tax income into the superannuation scheme excluding the electoral allowance which is taxable if not used for member expenses detailed in Australian Tax Office tax ruling 99-10.

Mr Somlyay said retirement benefits had to a degree compensated for salaries kept relatively low compared with public servants.

Salaries are paid monthly after tax while electoral allowances are taxed annually dependent on the amount not spent on expenses defined under the 99-10 tax ruling.

By comparison State Government MPs in Queensland receive taxable incomes between $50,000 and $80,000 higher than their federal counterparts.

State MPs serving on committees other than as the chair are paid around $13,000 as a supplement whereas only the chair in federal committees receives a stipend.

Facebook campaigns have been alive for the past year calling for MPs retirement entitlements to be withheld until they turn 70 years of age.

As it stands the benefits are payable from the time MPs leave office and supplement any subsequent income they may earn from other sources.